Top U.S. automakers reported a decline in their third-quarter sales on Tuesday, impacted by fewer selling days and weaker consumer spending amid inflationary pressures and higher interest rates. For years, carmakers have relied on crossovers and pickup trucks to drive most of their sales, but this growth is now faltering as customers face tighter budgets due to economic uncertainties.
General Motors saw a 2.2% drop in quarterly sales, with demand for some of its large pickup trucks, including its best-selling Silverado, weakening. Ford is expected to report weaker sales growth when it announces its third-quarter results on Wednesday, according to data from Cox Automotive. Toyota reported an 8% decline in sales but had built extra inventory of vehicles and parts ahead of the U.S. port strikes, which started earlier in the day, to minimize disruption.
Industry experts had anticipated a rebound in sales for automakers in the third quarter, but discounts offered by companies were insufficient to boost demand. "Consumers in the market continue to be pressured by high interest rates and slow-to-recede vehicle prices, which are resulting in high monthly payments," said Chris Hopson, principal analyst at S&P Global Mobility.
Chrysler-parent Stellantis cut its 2024 profit forecast on Monday and warned it would burn more cash than expected due to weak global demand and competition from Chinese rivals offering cheaper cars. Buyers are increasingly opting for more affordable models such as compact pickup trucks and SUVs like Ford's Maverick and Chevrolet's Trax. Subcompact SUVs and compact cars are currently two of the hottest vehicle segments, thanks to their relatively affordable price tags, according to Charlie Chesbrough, senior economist at Cox Automotive.
Hyundai posted a 5% increase in quarterly sales, supported by the sales of hybrid variants of crossovers like its Tucson and Santa Fe. Its sister company Kia reported a nearly 7% decline.
